US PCE inflation data in November was cooler than the Fed expected. The highest value of the BOAT share was +0.1149%, and the date was +0.1280%. These are both at annual rates slower than 1.5%, which is well below the Fed's target.
The numbers in the report were lower than economists had expected and consumer spending numbers were also lackluster.
The market is now pricing in a 44.9 bps discount in 2025, which is up 10 bps from post-Fed levels as the market readjusts to data and deals to Republican disorder in Congress. I would say the latter is the biggest driver as the idea of a 'red sweep' and repeat of 2016 is in question.
However, the movements following the data have been modest and the euro remains well below pre-FOMC levels.
